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The beginning of rate cut cycles has consistently been bullish for Housing Finance, Auto, and NBFCs — these sectors have tended to outperform by 10-15% over the next 6 months starting from the first cut. The market typically front-runs further cuts immediately.
Nifty 1 Day
+0.9%
Nifty 3 Days
+1.5%
Nifty 1 Week
+2.0%
Nifty 1 Month
+3.5%
RBI changed stance from 'calibrated tightening' to 'neutral' in Feb 2019 MPC, then cut rates 25bps. This began a 135bps cut cycle through 2019. Housing Finance and Auto were the biggest sector beneficiaries. Nifty rose 8% in 6 months.
Mortgage rates fell; housing demand revived
Consumer credit costs fall; loan demand grows
No significant laggards in the historical data.
RBI changed stance from 'calibrated tightening' to 'neutral' in Feb 2019 MPC, then cut rates 25bps. This began a 135bps cut cycle through 2019. Housing Finance and Auto were the biggest sector beneficiaries. Nifty rose 8% in 6 months.
Historically, LIC Housing, Bajaj Finance were among the strongest performers in the aftermath, based on real 1-week/1-month return data.
The Nifty 50 moved +2.0% in the following week and +3.5% over the following month.
The beginning of rate cut cycles has consistently been bullish for Housing Finance, Auto, and NBFCs — these sectors have tended to outperform by 10-15% over the next 6 months starting from the first cut. The market typically front-runs further cuts immediately.
Regime
bull
Repo Rate
6.25%
India VIX
15.5
Data Confidence
85%